INDUSTRY BRIEFS

SPR

U.S. Energy Department approved sale of another 1.9 million bbl of oil from the Strategic Petroleum Reserve for $39.5 million (OGJ, Nov. 4, p. 38). Successful bidders for crude from the West Hackberry site near Lake Charles, La., were Texaco Trading, which bought one batch of 200,000 bbl for $20.82/bbl and another for $20.57/bbl, and Coastal States Trading, which bought 900,000 bbl for $20.95/bbl and 600,000 bbl for $20.70/bbl.

Petrochemicals

Huntsman Corp., Salt Lake City, will purchase Amoco Chemical Co.'s polystyrene business. Included are Amoco polystyrene plants at Joliet and Willow Springs, Ill. Addition of their combined capacity of 330 million lb/year of high-heat/general-purpose crystal and high-impact polystyrene will hike Huntsman's U.S. polystyrene capacity to about 1.5 billion lb/year.

Yanbu Petrochemical Co. (Yanpet) will build a 535,000 metric ton/year polyethylene plant and a 260,000 ton/year polypropylene plant at its Yanbu, Saudi Arabia, petrochemical complex. Both will use Union Carbide's Unipol process. The plants are to be completed early in 2000. Yanpet is a 50-50 venture of Saudi Basic Industries Corp. and Mobil Yanbu Petrochemical Co.

Shell Chemicals Europe Ltd. secured a long-term deal to supply as much as 250,000 metric tons/year of styrene monomer to BP Chemicals Ltd. The monomer will be produced at Shell's Moerdijk, Netherlands, plant and used as feedstock at BP's polystyrene plant at Wingles, France.

Terminals

National Refinery Ltd., Karachi, will build three crude oil storage tanks at its Karachi complex to increase oil storage capacity by 45,000 metric tons and improve inventory levels to 22 days from 17 days. Project cost is estimated at $2.5 million. NRL increased its OP-V berth crude tanker capacity to 75,000 dwt from 45,000 dwt, necessitating the increased storage capacity.

Companies

El Paso Energy Corp. and Tenneco Energy are closer to completing their planned December merger (OGJ, July 1, p. 44). Tenneco received a favorable ruling from the Internal Revenue Service on its corporate restructuring and clearance from the Securities and Exchange Commission. El Paso scheduled a Dec. 9 shareholders meeting to vote on certain aspects of the merger; Tenneco shareholders will vote Dec. 10.

Saga Petroleum AS will exit Indonesia by putting its assets there up for sale. Saga and state firm Pertamina each hold 50% of Jambi Menang block, which holds the Gelam and Pulau Gading commercial gas/condensate fields that are to be brought on line as part of the Corridor Block development by Gulf Canada Resources Ltd.'s Asamera unit. Saga also holds 30% of Northwest Natuna Sea Block 2. Once the Jambi Menang interest is sold, Saga will close its Jakarta office, managing the Natuna Sea interest from Oslo, if it is not also sold.

Spills

Colonial Pipeline Co., Atlanta, said a weld seam failure caused its 8-in. products pipeline from Chattanooga to Nashville to rupture Nov. 5, spilling about 1,500 bbl of diesel fuel about 2 miles southeast of Murfreesboro, Tenn. Colonial quickly repaired the break. It will try to recover the spilled diesel and plans to install boom to protect the Murfreesboro water intakes on the Middle Stones River.

Exxon Corp. agreed in principle to a settlement with its insurers under which the company will receive $480 million for certain expenses and liabilities arising from the 1989 Exxon Valdez oil spill off Alaska. Exxon said the settlement will resolve all matters between the company and insurers relating to the incident, including Exxon's suit in a Texas state court, an arbitration proceeding between Exxon and insurers in New York, and a suit by insurance underwriters against Exxon in federal district court in New York.

U.S. Minerals Management Service signed agreements totaling $885,720 with Texas, Louisiana, and Mississippi to create a geographic database that industry and government can use for oil spill contingency plans. Similar pacts will be signed later with Florida and Alabama. Louisiana State University will compile the data by May 1998.

Pipelines

Gaz Metropolitain Inc., Montreal, will build a 137-mile natural gas pipeline between Lachenaie, Que., and the New Hampshire border. The $230 million (Canadian) line will be built for TransQuebec & Maritime Pipeline, in which Gaz Metro and TransCanada PipeLines Ltd., Calgary, are equal partners. The planned line will supply gas for the Portland Natural Gas Transmission System. The Portland line will deliver Canadian gas to markets as far south as Boston. Construction is to begin Dec. 1, 1997, for an in-service date of Nov. 1, 1998.

Express Pipeline Ltd., Calgary, reports completion of more than half the spreads on its 785-mile crude oil pipeline from Alberta to Casper, Wyo., via Montana. The company said the line is on schedule for completion in mid-December. Five firms from Texas and Oklahoma have contracts to build 513 miles of line in the U.S. Express said more than 50% of pipe has been laid for the project and about 30% has been completed and backfilled. Sites of nine pump stations along the line have been graded and prepared.

Coastal Corp. filed with the Federal Energy Regulatory Commission to build a pipeline to bring gas from South Texas' Bob West field to Monterrey, Mexico, not Bob White field, as incorrectly reported (OGJ, Sept. 23, Newsletter).

Russian and Romanian officials signed an agreement to expand capacity of a gas pipeline that transits Romania to 36.7 billion cu m/year and increase gas supplies to Romania to 14 billion cu m/year by 2010. Russia's Gazprom and Romania's Romgaz, meanwhile, will start a joint stock company to give Russian companies more opportunities to participate in gas pipeline construction.

Independent Petroleum Association of America and gas producers asked the U.S. Supreme Court to hear their appeal in the case of Conoco vs. FERC. Last August, the D.C. Circuit Court of Appeals upheld FERC's decision not to exercise jurisdiction over gathering facilities that pipelines have spun off to affiliated gathering companies.

Cogeneration

Australian Gas Light Co. and Alise Energy Australia will buy an estimated $1 billion (Australian) of natural gas during a 20-year contract term from Santos Ltd., Adelaide, Australia, for a planned $250 million (Australian), 350,000-kw Sydney cogeneration plant. The plant, which will use Cooper basin gas as feedstock to generate electricity, is to be operational in 1999, and the contract will extend from that time.

British Columbia selected Island Cogeneration Project (ICP) to build a cogeneration plant at Fletcher Challenge Canada Ltd.'s Elk Falls pulp and paper mill near Campbell River, B.C. The project, to cost more than $200 million (Canadian), will use about 42 MMcfd of gas to generate 240,000 kw of electricity for B.C. Hydro. Also, it will process steam for the mill. ICP is a joint venture of Fletcher Challenge Energy Inc., a unit of Fletcher Challenge Ltd., Auckland, which is a majority owner of Fletcher Challenge Canada, and Westcoast Power Inc., a unit of Westcoast Energy Inc., Vancouver, B.C.

Drilling-production

Norsk Hydro AS submitted a plan to Norway's Ministry of Industry & Energy to develop more oil reserves in giant Troll field with a new platform and 50 wells with horizontal sections. Total development cost is estimated at $2.45 billion. The plan anticipates first oil, from a thin oil layer in the field's gas zone, to be produced in September 1999. Troll C platform will be a production semisubmersible similar to the existing Troll B oil producer. A construction contract is to be tendered next month, with three Norwegian fabricators on a short list (OGJ, Sept. 2, p. 32).

Barrett Resources Corp., Denver, bought from an undisclosed seller producing and nonproducing properties in the Altamont-Bluebell field of Utah's Uinta basin. Total purchase price was $31.55 million, including a trade of Barrett properties worth $16 million, $13.8 million in cash, and 50,000 shares of Barrett stock. Total net proved reserves acquired were 14 million bbl of oil and 22.2 bcf of gas.

ARCO paid the Texas Land Office $584,721 in 1993 after calculating that it had underpaid royalties to the state in previous years, not $584 million, as incorrectly reported (OGJ, Oct. 28, p. 21).

Seven Seas Petroleum Inc., Houston, plans several confirmation wells after its 2 El Segundo appraisal on its Dindal association contract about 50 miles northwest of Bogota had an indicated gross oil column of about 441 ft based on electric logs, drill cuttings, and shows. Its 2 El Segundo, drilled to 6,291 ft TVD in upper Cretaceous Cimarrona, has not been tested yet. The well was drilled directionally to a bottomhole location 1,600 ft north of its 1 El Segundo discovery, which tested at rates of more than 3,000 b/d of oil. Seven Seas is in process of production complex permitting. Further wells will spot north and south of 1 El Segundo.

Imperial Oil Ltd., Toronto, will sell two of its older oil and gas fields in Alberta. Judy Creek oil field near Swan Hills produces about 12,000 b/d, and Wapiti gas field near Grande Prairie produces 30 MMcfd of gas and about 1,800 b/d of liquids. The company said the fields don't fit its long-term plan. They will be put on the market in 1997.

American Petroleum Institute estimated U.S. oil and gas drilling completions fell 10% in the third quarter from a year ago. Operators drilled 5,124 oil and gas wells and dry holes during the period vs. 5,680 a year ago. There were 79 exploratory and 1,572 development oil wells, 104 exploratory and 2,060 development gas wells, and 501 exploratory and 808 development dry holes. Development footage drilled dropped 7% and exploratory footage 8%. For the first 9 months this year, operators completed 15,373 wells (5,367 oil, 6,276 gas, and 3,730 dry), down 6% from 16,334 a year ago.

Total Angola disclosed results of its initial drilling program on Block 2/92 off Angola. Of five wells drilled, four located hydrocarbon columns and three tested oil and gas. Espadarte 1 North flowed on test 9,150 b/d of light oil (OGJ, May 27, p. 22); Congro 1 South flowed 20.8 MMcfd of gas and 2,350 b/d of condensate, and 1 Veleiro yielded 6,400 b/d of light oil. Interests are operator Total 40%, state-owned Sonangol 25%, South Korea's Daewoo 18.75% and Pedco 6.25%, and South Africa's Energy Africa 10%.

Gas processing

Morrison Petroleums Ltd., Calgary, will pay $120 million (Canadian) to purchase the Nevis gas plant and related facilities from Canadian Gas Gathering Systems Inc. The plant, 40 miles west of Red Deer, Alta., processes about 125 MMcfd of sour and sweet gas streams into residue gas, propane, butane, condensate, and sulfur. It draws gas from 11 producing areas through a 220-mile gathering system and serves more than 130 producers and 1,000 wells.

Exploration

Mobil Equatorial Guinea Inc. and United Meridian Corp. discovered a Zafiro field satellite on Block B off Equatorial Guinea. The 1 Rubi wildcat flowed on test at a controlled rate of 4,317 b/d of oil and 1.98 MMcfd of gas from a limited test interval above the main Rubi sand section in a Qua Iboe reservoir not previously seen locally. The new field is about 2 miles southeast of 1 Zafiro and will be developed as a satellite to Zafiro field, where production began in August and is now approaching 40,000 b/d (OGJ, Sept. 2, p. 38).

Santa Fe Energy Resources Inc., Houston, signed an exploration contract with Cote d'Ivoire to explore, develop, and produce oil and gas on the CI-24 block in the offshore portion of the Abidjan margin. Contract provides for three exploration periods totaling 5 years and a 20-year production period. Drilling is to begin in 1998. Early exploration will focus on interpretation of 3D seismic acquired by state-owned oil company Petroci. Operator and majority working interest owner is Santa Fe unit Santa Fe Energy Resources of Cote d'Ivoire. Petroci holds the remaining working interest.

Coalbed methane

Units of Equitable Resources Inc. (ERI), Pittsburgh, and MCN Corp., Detroit, formed a joint venture to drill as many as 360 coalbed methane (CBM) wells on 21,600 acres in Southwest Virginia in 7 years. Development drilling will occur in ERI's Nora field. The first 20 JV CBM wells have been drilled and are in various completion stages. A total of 70 wells is planned by yearend. The field, focus of development since 1981, contains 416 conventional gas wells and 233 CBM wells.

Refining

U.S. Commerce Department's Foreign Trade Zones Board received a petition from Chevron Products Co. asking for subzone status for its Perth Amboy, N.J., refinery. Zone procedures would exempt the refinery from customs duty payments on foreign products used in its exports and allow it to choose a finished product duty rate on domestic sales.

Marketing

Woolworths Ltd., an Australian supermarket chain, teamed with Castrol plc unit Burmah Fuels and Japan's Mitsui & Co. to sell gasoline at about 200 Woolworths' outlets. The chain will purchase fuel from Burmah's Singapore operations. The first outlet, a trial at Dubbo, N.S.W., opened recently. Woolworths has received permission for another five outlets in New South Wales and at rural centers in Victoria.